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<p>The total future subsidy cost of power generation by biomass will depend on future
deployment of this technology, which is uncertain, as this will depend on the relative
costs of this technology going forward. Given these uncertainties the EMR Delivery
Plan, included a number of illustrative deployment scenarios (see table below). However,
these scenarios are for illustration and are not exhaustive.</p><p> </p><table><tbody><tr><td><p><strong>Technology</strong></p></td><td><p><strong>GB
Deployment by 2020 (GW)</strong></p></td></tr><tr><td><p>Biomass Conversions</p></td><td><p>1.7
– 3.4</p></td></tr><tr><td><p>Dedicated Biomass</p></td><td><p>0.5 – 0.6</p></td></tr><tr><td><p>Dedicated
Biomass with Combined Heat and Power (CHP)</p></td><td><p>c. 0.3 – 0.6</p></td></tr><tr><td><p>Advanced
Conversion Technologies (ACTs) with and without CHP</p></td><td><p>c. 0.2 – 0.3</p></td></tr><tr><td><p>Anaerobic
Digestion (AD) with and without CHP</p></td><td><p>c. 0.3 – 0.4</p></td></tr><tr><td><p>Energy
from Waste with CHP</p></td><td><p>c. 0.4</p></td></tr><tr><td><p>Landfill Gas</p></td><td><p>c.
0.9</p></td></tr><tr><td><p>Sewage Gas</p></td><td><p>c. 0.2</p></td></tr></tbody></table><p>
</p><p> </p><p> </p><p> </p><p>The table below summarises the tariffs avaliable for
heat generation by biomass through the Renewable Heat Incentive (RHI), expected heat
production and expenditure in 2015/16.</p><p> </p><p>In the December 2013 Government
Response “Non-Domestic Renewable Heat Incentive: Improving Support, Increasing Uptake”
Government confirmed it would be introducing tariffs for medium and large biogas combustion
and increase the tariff for large biomass and biomass CHP. Subject to parliamentary
process, the intention is for this to be in place in spring 2014.</p><p> </p><table><tbody><tr><td>
</td><td><p><strong><em>Tariff available in 2014/15</em></strong></p></td><td><p><strong><em>Heat
produced in 2015/16 supported by RHI (TWh)</em></strong></p></td><td colspan="2"><p><strong><em>RHI
Expenditure in 2015/16 (£m, nominal)</em></strong></p></td><td> </td></tr><tr><td><p><strong><em>Total
RHI</em></strong></p></td><td> </td><td><p><strong><em>5.2-7.4 TWh</em></strong></p></td><td
colspan="2"><p><strong><em>£300-£426m</em></strong></p></td><td> </td></tr><tr><td><p><strong>Small
Biomass Boilers (<200kW)</strong></p></td><td><p>Tier 1: 8.8p/kWh Tier 2: 2.3p/kWh<sup>1</sup></p></td><td><p>1.1-1.3
TWh</p></td><td colspan="2"><p>£76-92m</p></td><td> </td></tr><tr><td><p><strong>Medium
Biomass Boilers (200-999kW)</strong></p></td><td><p>Tier 1: 5.1p/kWh Tier 2: 2.2p/kWh<sup>1</sup></p></td><td><p>1.7-1.9
TWh</p></td><td colspan="2"><p>£67-73m</p></td><td> </td></tr><tr><td><p><strong>Large
Biomass Boilers (>1MW)</strong></p></td><td><p>Currently: 1p/kWh New Tariff: 2p/kWh</p></td><td><p>0.8-1.2
TWh</p></td><td colspan="2"><p>£10-19m</p></td><td> </td></tr><tr><td><p><strong>Biomass
CHP</strong></p></td><td><p>New Tariff: 4.1p/kWh</p></td><td><p>0.2-0.9 TWh</p></td><td
colspan="2"><p>£8-£37m</p></td><td> </td></tr><tr><td rowspan="4"><p><strong>Biogas
and Biomethane Injection</strong></p></td><td><p>Small Biogas (<200kW): 7.5p/kWh</p></td><td
rowspan="4"><p>0.7-1.1 TWh</p></td><td colspan="2" rowspan="4"><p>£54-82m</p></td><td>
</td></tr><tr><td><p>New Tariff: Medium Biogas (200-599kW): 5.9p/kWh</p></td><td>
</td></tr><tr><td><p>New Tariff: Large Biogas (600kW+): 2.2p/kWh</p></td><td> </td></tr><tr><td><p>Biomethane
Tariff: 7.5p/kWh<sup>2</sup></p></td><td> </td></tr><tr><td><p><strong>Domestic Biomass
Boilers<sup>3</sup></strong></p></td><td><p>12.2p/kWh</p></td><td><p>0.05 - 0.15 TWh</p></td><td
colspan="2"><p>£6-19m</p></td><td> </td></tr><tr><td colspan="4"><p><sup>1</sup> The
tier 1 tariff is paid on the first 1,314 hours of eligible heat production, any eligible
heat produced after this will receive the tier 2 tariff.</p></td><td colspan="2">
</td></tr><tr><td colspan="4"><p><sup>2</sup> In February 2014 DECC announced an early
review of the biomethane tariff, a consultation on this is expected shortly</p></td><td
colspan="2"> </td></tr><tr><td colspan="4"><p><sup>3</sup> Does not include RHI Legacy
applications, we anticipate that they will cost approximately £9m in 2015/16</p></td><td
colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td> </td><td> </td><td>
</td></tr></tbody></table><p> </p><p> </p><p>These tariffs are for 2014/15 and are
increased by RPI each year. New applicants are potentially subject to degressions
(reductions in payment) if demand reaches certain pre-set triggers.</p><p> </p><p>Deployment
potential beyond 2015/16 will depend on the Government's 2015 spending review.</p><p>
</p><p> </p>
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